Looks Like IP Is About To Slow Down Innovation In Clean Tech

from the there-goes-that-idea dept

Plenty of studies have shown, over and over again, that in an emerging market, the last thing you want is patent protection. It slows down innovation and adoption drastically. That's because in a brand new emerging market, the bigger issue is actually figuring out how to get the market established -- and that means a lot of different efforts getting thrown at the wall, and the ability for multiple parties to try different approaches to getting things to work in a way that the market wants. Often this means a lot more sharing of ideas (even among competitors), as everyone begins to recognize that getting over that adoption hurdle is a much bigger deal than hoarding IP. And that's a key point. With these emerging markets, the incentive is often the realization that when the market need is actually met, it will make a lot of people very wealthy, not by hoarding IP, but by selling product. This is a perfect example of a market where patents make no sense at all. There's no need for monopoly protections where the market can accurately reward the innovators.

The clean tech market has been an interesting one to watch, because it certainly has not needed patents to keep people interested. Lots of companies have been jumping into the market, realizing that the world needs better energy solutions, and recognizing that those who successfully crack that nut won't have to worry about patents, but about being able to actually serve the demand. But, those who look at innovation entirely through the spectrum of patents would like to paint a different picture. Reader bretton points out that a recent document sent around by a big law firm is pushing the idea that patents will be essential for "fostering innovation" in clean tech (pdf). Of course, studies (and history) have shown exactly the opposite... but, of course, more patents would be good for the law firm and its business.

At almost the same time as that link was sent over, Michael Koch alerted us to a discussion of how some big companies are suddenly very interested in patents on clean tech. It notes that, prior to this year, there was very little interest in the clean tech community for patents or patent issues, but as the new administration talked up the importance of working together and sharing information (even across borders) to further the goal of actual innovation (rather than the hoarding of ideas), suddenly the US Chamber of Commerce unleashed its lobbying muscle to demand that patents be a big part of this:

However, this situation changed dramatically in the spring and summer of 2009 with the advent of the Obama administration making public statements about sharing technology related to energy. In reaction, the United States Chamber of Commerce, a leading lobby representing businesses, is expressing growing concern that moves to spread new energy technologies to developing countries could erode the IP rights that have driven commercial efforts to innovate for generations.

Late in May 2009, the group and representatives of General Electric, Microsoft and Sunrise Solar gathered in Washington to launch the Innovation, Development & Employment Alliance, or I.D.E.A. The initiative is aimed at pressing Congress and the Obama administration to ensure that global climate-treaty talks do not weaken protections on who can profit from new technologies that provide abundant energy without abundant pollution. The creation of I.D.E.A. has been widely noted, with some alarm, in the IP "watchers" community, and likely means the status of alternative energy as a less-observed IP sector is finished for good....

The new Secretary of Energy, Steven Chu, a Nobel Prize winner, has publicly supported collaborating with developing countries - in particular China - and sharing all IP rights of the resulting technologies. He has already pushed forward with a new U.S.-China Clean Energy Research Center, developed with $15 million dollars each from the U.S. and Chinese governments, and designed to create innovative technologies for building energy efficiency, clean coal (including carbon capture and storage) and clean vehicles. In addition, Secretary Chu is advocating for the development of open-source building energy-efficiency software that will make it cheaper and easier for developers to implement energy saving measures in new buildings, both in the U.S. and in emerging economies like China and India.

Such an effort could certainly help advance some of the important scientific research and innovation in clean tech issues... but of course, this new lobby is having none of it:

In reaction, I.D.E.A.'s first act was to back the Larsen-Kirk Amendment to the Foreign Relations Authorization Act (H.R. 2410). The amendment calls on the President, the Secretary of State and the Permanent Representative of the United States to the United Nations to uphold the existing international legal requirements for IP rights and avoid any weakening of them for the UNFCCC in the context of energy and environmental technology. The Amendment passed the House with a 432-0 vote. It was described as an amendment to protect U.S. green jobs and U.S. technology innovation.

Of course, the reality is exactly the opposite. If we don't make the necessary innovation breakthroughs then there won't be that many US green jobs at all. It's stunning in this day and age that politicians can still be convinced that such protectionist policies protect jobs rather than limit them. Getting serious innovation in the clean tech market will create tremendous job opportunities. Focusing on who gets to own the patents (and blocking foreign collaboration) at this stage only delays the ability for the US to create those jobs and to move to better energy options.

This is a country where far too many people believe that the President's new health care plan truly calls for "euthanasia panels" for older and/or handicapped folks. My point in mentioning that is that shills for this protectionist racket get up and tell the American People, "OMG!!! We can't share our technologies with the Chinese! It'll be bad! Trust us!" This scares the bejeebers out of John Q. Public, and if it scares him, you'd better believe that is scares his "elected" representative who is trying to keep their cushy job in Fantasy Land (Washington D.C., for those of you with an un-updated map.).

There are a LOT of issues right now facing the Republic, and the tragic reality is that most of the people are too ignorant of the issues because we trust these folks. I mean after all, you have the people who brought us Windows Vista and the folks who brought us the prime time lineup for NBC involved, so what could possibly go wrong here?

I'm still having a real hard time believing that this whole Clean/Green Tech wasn't monetarily motivated.

When a proposal is on the table to re-jigger main infrastructure such as electrical grids, based on science that says the earth is warming due to CO2 (and not the more reasonable theory of increased sunspots and Solar Maximum) it's a little weird, but easier to sell to the public, perhaps if you can equate it to polarbears stuck on icecubes floating outside of Wasilla. It makes for good television, I guess.

It's even more odd that I've seen upwards 2 "shooting stars" every month for the past 6 months. Reliable sources tell me these are actually satellites falling out of orbit, and could a precursor to Solar Maximum.

Take it for what it's worth, but this whole thing smells like a big con.

Sorta

I agree that nationalistic protectionism, generally, results in negative effects for the market being protected.

"Lots of companies have been jumping into the market, realizing that the world needs better energy solutions, and recognizing that those who successfully crack that nut won't have to worry about patents, but about being able to actually serve the demand."

Idealistic, but the companies jumping into the market are getting in because (hopefully what with fiduciary responsibility and all that) because they see the opportunity for PROFIT through the creation of better energy solutions. Those who successfully crack the nut will absolutely be reliant on patents to ensure that they can recoup their investment and gain the PROFIT that drove them into the market to begin with. Of course there are companies that align ethical stances with their market entrance and that's great, but there would be no company without cashflow.

This is especially the case with companies that don't have their own manufacturing and distribution capability. When they invent, they HAVE to rely on patents and contracts to ensure that their innovation can be brought to market to their benefit (profit) rather than just copied by every other company with manufacturing capabilities. I'd note that China is one of the most notorious markets for the creation of knock-offs so fears in that particular case are not unfounded.

It's also important to keep in mind that green energy is HARDLY new and has had great success innovating in IP-controlled markets like the US. The US market has been the major site for solar, wind and hydro innovation over the last 75 years. Small companies, like the old Solarex all the way through to GE have played a role. Bell Labs (talk about a focus on IP) was the site of the pivotal breakthrough for solar via silicon in the 1940s, as an example. There are now 200+ companies worldwide researching and building solar. As a solar enthusiast of old, I applaud the increased level of investment and interest.

So, while I agree that unbridled nationalistic protectionism must be moderated, the fears involved are not unfounded and the reasonable protection of IP as it relates to green energy has not to date and will not in the future stunt innovation.

Re:

whenever i see "Reliable sources" my BS detector goes off. This past solar cycle has been pretty dormant compared to others in the 20th century. Solar activity just started picking up in April and May.

I don't agree...

So lets call everyone I don't agree with a communist! How about you back up the bullshit train and back up your arguments before you start name slinging. Give us some proof like research, historical precedent, facts. Oh wait I guess I'm assuming you have any...

Patents

Before there were patents, there were such massive abuses by large entities that the English, and later our Founding Fathers, considered it imperative that we provide IP protection.
It worked so well that now people argue it is unnecessary.
The truth is NOT at the extremes, but in the center!
Even so, I agree with Mike; the way patents are used today hurts everyone, and is crippling the world economy.
Going back to what the Founding Fathers INTENDED, though, would prevent the abuse they sought to AVOID!

Re:

Hello Mike,
So it looks again as if we will have to respectfully disagree with one another, which at least provides a little spice here and there, nicht wahr? I still cannot comprehend why you so avidly attempt to remove the rights that the US government has awarded to innovative folks, and Yes *inventors*. Say it with me now Mike, "Innovators are not the same as Inventors." What point about that do you not understand? Why are inventors always bad and greedy in your opinion? Just because they want to earn a profit for about 10 years for their *invention*? Yes Mike, their are real inventions and inventors out there, whether you happen to like it or not. They will not go away, as it is a major part of American history. Why are you trying to change that so vociferously? IT influences, or perhaps a Chinese connection?
Despite all your blustering, there are very few facts and NUMBERS included in your Daisy-Chain postings. That is very unfair to inventors all over the world, and not just to those here in the US.

Re: Re:

So why is it that your "BS detector" goes off for a minor commenter, but not for the article's author? "Plenty of studies have shown, over and over again, that in an emerging market, the last thing you want is patent protection." "Plenty of studies" doesn't set off your BS detector? Are we supposed to believe there aren't "plenty of studies" that show the opposite to be true? Are we supposed to believe that these "plenty of studies" are the one, true, authoritative, and gospel studies which prove, beyond all doubt, what they study? Give me a break. Congrats on another crack in the face of journalistic ethics. This isn't journalism. It's propaganda with a clear agenda.

Sorry about the late post...

Color me confused by Microsoft's behavior. In this case, unsurprisingly, Microsoft is asserting that it needs patent protection in the Green Energy market. Watching that tussle will be interesting since I've been interested in environmental economics for a very long time (long before I received my Econ degree) so I know what players (IBM, HP, Sun, etc.) are doing. Microsoft is persuing methods of using Group Policy and the like to enforce energy saving practices in the enterprise market segment even though third-party players have already staked it out for quite a while now, in internet time.

No, the confusion arises from another recent article posted on several news sites. Specifically: "The IEEE has brought together an alliance of anti-virus vendors in an industry group that aims to improve and better organise collaboration, with an initial focus on better standards for malware sample sharing."

"Vendors including AVG, McAfee, Microsoft, Sophos, Symantec and Trend Micro have signed up to the newly newly-formed Industry Connections Security Group (ICSG). Anti-virus researchers at these firms (and others such as Kaspersky and F-secure yet to sign up to ICSG) have been sharing virus samples for years. What the ICSG wants to bring to the party is better organisation and standardisation to this process...."

In order to even make this work, everyone had to work under an IEEE working group (ICSG) to sidestep the anti-trust legal framework. Now imagine what could happen if all the green energy companies could agree to a similar IEEE framework. I don't have to imagine due to my involvement in the energy sector. If you follow the research papers, we are only beginning to scratch the surface of green energy production. While I don't subscribe to the environmental catastrophe model of the 'global warming' crowd, green is simple common sense, in my not so humble opinion. Don't mess with the world around you if you can avoid it (create externalities). Consequences, of some sort, may follow. Duh!